Overview
For 2025, Canadian first-time home buyers have access to several government incentives and programs designed to make homeownership more affordable. While the CMHC First-Time Home Buyer Incentive (FTHBI) was a key shared-equity program in previous years, it was officially cancelled in March 2024. However, several alternative programs remain available, including expanded RRSP withdrawal limits, tax credits, the First Home Savings Account (FHSA), and provincial programs.
Key Programs for First-Time Home Buyers in Canada (2025)
1. First Home Savings Account (FHSA)
- Save up to $40,000 tax-free toward your first home.
- Annual contribution limit: $8,000.
- Combines tax-free growth with tax-deductible contributions.
- No repayment required. Funds can transfer to RRSP/RRIF if unused.
2. Home Buyers' Plan (HBP)
- Withdraw up to $60,000 from your RRSP tax-free for a home purchase.
- Limit increased from $35,000 in April 2024.
- Must be repaid over 15 years to avoid tax penalties.
3. Home Buyers' Amount (Tax Credit)
- Non-refundable tax credit up to $1,500 (15% of $10,000).
- Available on qualifying homes purchased in 2024 or later.
- Maximum credit is $10,000 per couple; eligibility includes those claiming the Disability Tax Credit.
4. Land Transfer Tax Rebates
- Provincial programs offer rebates; for example, Ontario provides up to $4,000 for first-time buyers.
- Eligibility rules vary by province; available in select provinces/cities.
5. GST Exemption on New Builds (2025 Proposal)
- Proposed removal of 5% GST on new or substantially renovated homes.
- Potential savings up to $50,000 on homes valued at $1M.
- Pending legislation; not yet law.
Shared Equity Incentive: Status Update
| Program Name | Status | Key Features | Max Benefit | Repayment Terms |
|---|
| CMHC First-Time Home Buyer Incentive (FTHBI) | Cancelled (March 2024) | 5% (resale)/10% (new build) shared equity | Up to 10% of home price | Repay % of sale price when sold |
| FHSA | Active | Tax-free savings + deduction | $40,000/person | None |
| HBP | Active | RRSP withdrawal for down payment | $60,000/person | Repay in 15 years |
| Home Buyers’ Amount | Active | Tax credit | $1,500 | N/A |
| Provincial Rebates | Active | Land transfer tax rebates | $4,000 (ON) | N/A |
| GST Exemption (New Builds) | Proposed (2025) | GST removed on new homes | Up to $50,000 | N/A |
Provincial Variations and Programs
Ontario
- Land Transfer Tax Rebate: Up to $4,000 for first-time buyers.
- Access to all national programs, including FHSA, HBP, and Home Buyers’ Amount.
Other Provinces
- Similar land transfer tax rebates (amounts and eligibility vary).
- Check with your province for specific programs and eligibility.
Major Canadian Bank Offerings
- Most major banks offer FHSA and support HBP withdrawals.
- Banks may offer special mortgage rates or cashback incentives for first-time buyers, but these vary by financial institution.
- It is highly recommended to compare rates and incentives across multiple lenders.
Recommendations and Next Steps
- Compare mortgage rates and lender incentives using a trusted platform. For personalized, competitive rates from top Canadian lenders, start your application at theratefinder (theratefinder.ca/onboarding/email). Theratefinder offers a sophisticated multi-step application process to help you secure the best mortgage for residential, commercial, or construction needs.
- Open an FHSA to maximize your tax-free savings for a down payment.
- Consider using the HBP if you have RRSP savings available.
- Check eligibility for provincial tax rebates (especially land transfer tax).
- Monitor legislative changes regarding the GST exemption on new builds if you’re considering new construction.
Summary
While the CMHC shared-equity incentive was cancelled in 2024, Canadian first-time buyers in 2025 still have access to substantial support through the FHSA, HBP, tax credits, and provincial rebates. Compare your mortgage options and leverage these incentives to make your first home purchase more affordable. For a comprehensive rate comparison and streamlined application, begin with theratefinder.